JMP Group Inc. is a full-service investment banking and asset management firm that provides investment banking, sales and trading, and equity research services to corporate and institutional clients and alternative asset management products to institutional and high-net-worth investors. JMP Group operates through three subsidiaries: JMP Securities, Harvest Capital Strategies and JMP Credit Advisors. JMP Group is listed on the New York Stock Exchange and trades under the symbol “JMP.”
JMP Securities LLC is an affiliated company and subsidiary of JMP Group Inc. and is a registered broker-dealer and member of The Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). Harvest Capital Strategies LLC is an affiliated company and subsidiary of JMP Group Inc. and is registered as an investment advisor with the U.S. Securities and Exchange Commission. JMP Credit Advisors is an affiliated company and subsidiary of JMP Group Inc. and is a manager of corporate debt employing active investment strategies in the loan, fixed income and structured products markets.
All references to “JMP” herein refer to JMP Group Inc. and its various subsidiaries.
Investment Protection Principles and Research Analysts’ Conflict-of-Interest Policies
Pursuant to NASD Rule 2711 and other initiatives stemming from the New York State Attorney General Eliot Spitzer’s agreement with Merrill Lynch & Co. (“the Merrill Lynch principles”), effective July 1, 2002, JMP Securities has amended or reaffirmed its policies related to research analysts. Following are excerpts from our written supervisory procedures that address the Merrill Lynch principles:
No JMP Securities research analyst may be subject to the supervision or control of any employee of JMP Securities’ investment banking department. The firm’s research personel report to the managing director with overall management responsibility for the research department (the “Director of Research”). In turn, the Director of Research reports to JMP’s Executive Committee. Currently, there is one member of the Executive Committee who is in the investment banking department, however, he does not exercise any direct control over any employee of the research department.
JMP Securities will not pay any research analyst any bonus, salary or other form of compensation that is based upon a specific investment banking transaction. The analysts’ compensation shall be based upon several factors. Chiefly among such factors is the quality of the research and financial advice provided to our institutional customers and the impact that the analysts’ research has on the success of JMP Securities’ overall business. Such success may be measured by the overall commissions and fees that JMP Securities’ institutional customers pay the firm, as well as the overall number of times JMP Securities is selected by its corporate customers to render advisory, underwriting and other financial services to them. Final compensation is decided by JMP’s Compensation Committee consistent with NASD Conduct Rule 2711(d) (the “Rule”). If any member of the Compensation Committee is part of the investment banking department, such a member will abstain from rendering any opinions regarding research analysts.
JMP Securities and its employees are prohibited from offering, directly or indirectly, favorable research, a specific rating or a specific price target to a company or from threatening to change research, a rating or a price target as consideration or inducement for the receipt of business or compensation. As such, publication of research for any reason other than the professional obligation to provide good advice to institutional customers, is against JMP Securities policies and is in violation of the Rule. In the event that JMP Securities decides to drop coverage of a company, a final note will be published outlining the reasons. The Director of Research will review and approve all research recommendations to ensure adherence to policy, while the Director of Compliance will review all research to ensure adherence to the Rule.
Research Report Disclosures
JMP Securities must disclose in research reports whether:
- the research analyst principally responsible for preparation of the report received compensation that is based upon, among other factors, JMP Securities’ investment banking revenues;
- JMP Securities or its affiliates managed or co-managed a public offering of securities for the subject company in the past 12 months;
- JMP Securities or its affiliates received compensation for investment banking services from the subject company in the past 12 months; or
- JMP Securities expects to receive or intends to seek compensation for investment banking services from the subject company in the next three months.
Public Appearance Disclosures
Research analysts must disclose in public appearances whether they know or have reason to know that the subject company is a client of JMP Securities or its affiliates.
The Director of Compliance shall attest annually to the NASD that JMP Securities has adopted and implemented the aforementioned procedures.
SEC Rule 605
In compliance with SEC Rule 605, order execution information can be accessed by clicking the link below.
JMP Securities Rule 605 order execution information
(September 2013 to present)
JMP Securities Rule 605 order execution information
(prior to September 2013)
SEC Rule 606
In compliance with SEC Rule 606, information regarding the routing of customer orders can be accessed by clicking the link below.
JMP Securities Rule 606 routing information
(3rd quarter 2013 to present)
JMP Securities Rule 606 routing information
(1st quarter 2012 through 2nd quarter 2013)
National Instrument 24-101 Trade Matching and Settlement
An institutional trade matching statement endorsed by the Canadian Capital Markets Association can be accessed by clicking the link below.
Characteristics and Risks of Standardized Options
Information on the characteristics and risks of standardized options is furnished by The Options Clearing Corporation and can be accessed by clicking the link below.
Payment for Order Flow
JMP Securities does not engage in any agreements for payment for routing order flow to or receiving order flow from any designated exchanges, market makers, broker-dealers or market centers; nor does it engage in any other arrangements that are required to be disclosed as defined in SEC rule 10b-10(d)(9). Certain market centers offer cash rebates for orders that provide liquidity to their books and charge fees for orders that extract liquidity from their books. Occasionally, the value of the credits received by JMP Securities from one or more such market centers may exceed the amount charged to JMP Securities. Under these limited circumstances, such payments would constitute payment for order flow.
JMP Securities does not accept Good-Til-Cancelled orders from customers of its institutional trading desk; JMP Securities accepts only day orders from them. If such a customer sends JMP Securities a Good-Til-Cancelled order, it will be treated by JMP Securities as a day order in all respects. If you have any questions or concerns about this policy and practice, please contact your JMP Securities representative.
Extended Hours Trading Risk Disclosure
Pursuant to both FINRA and NASDAQ rules, JMP Securities is required to provide the following disclosures regarding risk associated with customer trading in the Pre-Market and Post-Market Sessions:
- Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity in extended hours trading as compared to regular market hours. As a result, your order may only be partially executed, or not at all.
- Risk of Higher Volatility. Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in extended hours trading than in regular market hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price in extended hours trading than you would during regular markets hours.
- Risk of Changing Prices. The prices of securities traded in extended hours trading may not reflect the prices either at the end of regular market hours, or upon the opening of the next morning. As a result, you may receive an inferior price in extended hours trading than you would during regular market hours.
- Risk of Unlinked Markets. Depending on the extended hours trading system or the time of day, the prices displayed on a particular extended hours system may not reflect the prices in other concurrently operating extended hours trading systems dealing in the same securities. Accordingly, you may receive an inferior price in one extended hours trading system than you would in another extended hours trading system.
- Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after regular market hours. Similarly, important financial information is frequently announced outside of regular market hours. In extended hours trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
- Risk of Wider Spreads. The spread refers to the difference in price between what you can buy a security for and what you can sell it for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular security.
- Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (“IIV”). For certain derivative securities products, an updated underlying index value or IIV may not be calculated or publicly disseminated in extended trading hours. Since the underlying index value and IIV are not calculated or widely disseminated during the pre-market and post-market sessions an investor who is unable to calculate implied values for certain derivative securities products in those sessions may be at a disadvantage to market professionals.
Potential Risks of Hedge Fund Investing
Offers and sales of hedge fund or other investment products are not made by this site and are only made by an offering memorandum when, as and if provided by Harvest Capital Strategies and, in any case, are only provided to accredited investors (as defined in the Securities Act of 1933, as amended) and qualified clients (as defined in the Investment Advisers Act of 1940, as amended). Potential interested parties should be aware that investments in hedge funds, including funds of hedge funds, are highly speculative, illiquid and involve a substantial element of risk. Any potential investor in a hedge fund should be prepared and able to lose an entire investment without hardship to them.
Any potential interested parties should also be aware of the following general risks to hedge fund investing. All of the following are in addition to the specific risks that may be associated with any particular investment and should be considered in evaluating the merits and suitability of making such an investment:
- Loss of Capital. Investors are at risk of losing all or a substantial amount of any investment.
- Past Results. Past results are not a guarantee as to the future performance of an investment or a strategy.
- Speculative Investment Practices. Among other things, hedge funds may engage in leverage and other speculative investment practices that may increase the risk of loss.
- Illiquidity. Investments are subject to limitations on withdrawals that make fund interests relatively illiquid.
- Infrequent Valuation Information. Funds managed by Harvest Capital Strategies are not required to provide frequent pricing or valuation information, and dissemination of tax information to investors may be delayed.
- No Registration of Funds or Interests. Neither the funds managed by Harvest Capital Strategies nor the interests therein are registered with any regulatory authority, and Harvest Capital Strategies does not intend to so register them.
- Limited Access to Information on Investments. Information regarding underlying investments in a fund of funds may be severely limited, and the manager may be unable to obtain additional or verify such information provided.
- Fees and Expenses. The fees and expenses charged by hedge funds are typically higher than the fees charged by registered mutual funds.
- Certain Tax Risks. An investment in a hedge fund may involve certain tax risks. In addition, particularly with respect to funds of funds, delays in manager reporting may require investors to seek extensions of the deadline to file their tax returns.
The foregoing does not purport to be a complete explanation of the risks involved in investing in hedge funds. A hedge fund’s offering materials typically describe the risks and conflicts of interest relating to an investment in the fund. Each prospective investor who is qualified by Harvest Capital Strategies and receives these documents is urged to read them carefully to determine whether an investment in such fund is suitable for such investor in light of, among other things, such investor’s financial situation, need for liquidity, other investments and other general considerations.
Material, Non-Public Information
JMP Securities has policies and procedures in place reasonably designed to prevent the unauthorized use and disclosure of material, non-public information about securities issuers, pending research reports and other confidential data. These policies are intended to ensure that all information provided by JMP to others is done so appropriately and in accordance with all applicable laws, rules and regulations.
In accordance with the Federal Financial Privacy Law (Gramm-Leach-Bliley Act, Nov. 1999), the following are JMP’s privacy policies applicable to non-public personal information gained from this website and to its business relationships in general:
In the course of our relationship with you, we receive or develop information about you necessary to better service your account and your financial needs. This information may include: information you provide to us orally or on applications or other forms; information we develop about you in the course of providing our services to you, such as your account balance(s), the assets that we manage and the transactions we place on your behalf; and technical information we gather through your access to our website.
As a general rule, we do not sell, share or otherwise disclose this private information with others unless such sharing of information is necessary to provide our services to you. For instance, there may be sharing of information between the two subsidiaries of JMP, where each subsidiary is rendering a service to a customer common to both. Furthermore, we share information with certain third parties, such as our clearing agent, custodian, administrators, prime brokers, attorneys and auditors who, in the ordinary course of providing their services to us, may require access to information containing your non-public personal information. In addition, we may disclose your non-public personal information to others with your consent, where required by law or judicial process (such as a court order), or otherwise to the extent permitted under the Federal Financial Privacy Law.
We restrict access to your non-public personal information to those associates who need to know such information in order to provide services to you. If we are not comfortable that a service provider is already bound by duties of confidentiality (i.e., attorneys and auditors), we will require contractual assurances that the service provider will maintain the confidentiality of any of the information obtained from us. In addition, we maintain physical, electronic and procedural safeguards to protect your non-public personal information. We continually assess new technology and upgrade our system when appropriate to better protect information.
In accordance with the USA PATRIOT Act and other regulations applicable to it, JMP advises users of its website that it will fully comply with any and all regulations which may be promulgated by the U.S. Treasury Department under the USA PATRIOT Act, including those that encourage financial institutions to share information with regulatory agencies and law enforcement about individuals or organizations that may be “reasonably suspected based on credible evidence” of engaging in terrorist acts or money laundering. Accordingly, any information provided to JMP may be provided to regulatory, government or law enforcement agencies if requested or if deemed appropriate by JMP.
If you have any questions about our practices with respect to your non-public personal information, you may write to us at 600 Montgomery Street, Suite 1100, San Francisco, CA 94111 or call us at (877) 263-1333.
Securities Investor Protection Corporation (SIPC)
JMP Securities is a member of SIPC. For more information or to obtain a brochure about this program, please go online to http://www.sipc.org/. Alternatively, SIPC can be reached by phone at (202) 371-8300, by fax at (202) 371-6728, by email at firstname.lastname@example.org, or by mail at Securities Investor Protection Corporation, 805 15th Street, N.W., Suite 800, Washington, DC 20005-2215.